We are installing a battery energy storage system. What will insurers and owners ask about our insurance?

Why is battery work underwritten differently?

The concern is thermal runaway. NFPA describes it as the rapid uncontrolled release of heat energy from a battery cell, which can set off a chain reaction in neighboring cells and end in a fire or explosion. NFPA lists three related hazards: stranded energy that can cause reignition hours or days later, toxic and flammable gases, and deep-seated fires that take large amounts of water to cool.

NFPA also lists how batteries fail. Mechanical abuse is the first: a battery that is dropped, crushed or penetrated. Thermal abuse, electrical abuse such as overcharging, and environmental causes such as flooding follow. Several of those can happen during shipping, rigging, installation and commissioning. Lockton notes that risk engineers evaluate proposed contractor competence as part of early project review.

The AGC’s 2026 paper on data-center construction makes the same point for buildings: lithium-ion batteries present a fire risk that is harder to control because of thermal runaway.

Which standards will they name?

Who insures the batteries before handover?

This is the question in the article on installation floaters, with higher stakes. Battery modules are shipped to site and may be stored before they are installed. Lockton’s guidance for developers lists marine cargo insurance for transit of battery modules, inverters and main power transformers, and notes it can be arranged to complement contractors’ existing marine policies. That wording assumes contractors may hold marine or transit policies of their own.

On site, the project’s builder’s risk policy usually insures the permanent works, and an installation floater insures property a contractor is installing. Under the AAIS installation floater reviewed by FC&S, damage during testing and commissioning is covered only if a testing endorsement is added.

• Ask who bears risk of loss for the batteries at each stage: factory to port, port to site, storage, installation, energization and acceptance.
• Ask whether you are an insured on the builder’s risk policy and whether its insurer has waived recovery against you.
• Ask which policy covers a failure during commissioning, when the system is first charged.

Where does pollution come in?

A battery fire produces smoke and gas, and fighting it uses a great deal of water. Under the standard general liability form CG 00 01, the pollution exclusion has an exception for bodily injury or property damage arising out of heat, smoke or fumes from a hostile fire, which the form defines as one that becomes uncontrollable or breaks out from where it was intended to be.

That exception has limits. It is written for heat, smoke and fumes. It does not mention water or soil contaminated by firefighting, and the exclusion separately removes clean-up costs ordered by a regulator. If your policy carries a total pollution exclusion, check whether a hostile fire exception survives: CG 21 55 keeps one, and CG 21 49 has none in its title.

Lockton’s guidance lists environmental impairment liability among the covers a developer should consider. For a contractor the matching question is whether it carries contractors pollution liability and what the subcontract requires.

What should I have ready?

No published questionnaire for installing contractors was found for this article. The list below is drawn from what insurers and brokers say they look at on the project, turned into the documents a contractor is likely to be asked for.

• The manufacturer’s UL 9540A test reports and certifications for the system being installed.
• Evidence that your scope is being installed to NFPA 855 and to the manufacturer’s instructions, including handling and storage requirements.
• Your experience with battery storage projects. Lockton warns developers about relying on contractors without proven experience in this work.
• Your method statements for rigging, energization and commissioning, and the site emergency response plan. The 2026 edition of NFPA 855 added requirements for one.
• Your own policies: general liability with its pollution wording, pollution liability if you carry it, property cover for equipment in transit and during installation, and professional liability if your scope includes design or commissioning.

Related questions

What is UL 9540A?

It is a test method for evaluating thermal runaway fire propagation in battery energy storage systems. UL Solutions describes testing at cell, module, unit and installation level, and says it is the only consensus standard explicitly cited in NFPA 855 for large-scale fire testing.

Does NFPA 855 apply to the contractor or the owner?

It is an installation standard. NFPA says to review it if you are installing an energy storage system for new construction or a renovation, so the installing contractor’s work is what has to meet it. Who is responsible for compliance under the contract is set by the contract.

Does general liability cover a battery fire that I cause?

Fire damage to other people’s property is the kind of loss general liability is written for, and the pollution exclusion has a hostile fire exception for heat, smoke and fumes. Damage to the batteries you are installing, clean-up ordered by a regulator, and any total pollution exclusion on your policy are separate questions.